There are claims at least 200 police and army personnel were involved in the alleged operation. Photograph: Andrew Brownbill/AAP

Villagers in a remote West Papuan town have described being beaten and having guns pointed at their heads during a “terrifying” police and military operation at a local church.

One victim, who spoke to Guardian Australia but asked not to be named because of fear for his safety, said Indonesian police and military officers herded villagers into a church in Dondobaga, in the mountainous Puncak Jaya region of West Papua, early on a Sunday morning and told them they would be killed.

Villagers were woken and ordered to enter the church at 3am, according to the victim. There they were interrogated about their involvement with the separatist Free Papua Movement (OPM), threatened and beaten with the butts of rifles, he said.

“At 3am the military woke us up and ordered all of us to enter the church building. At 10am we were ordered to return outside to the churchyard and there we crouched for two hours.

“One by one we … were interrogated in the yard of the church. After two hours [the soldiers] told us, ‘close your eyes’. They were going to shoot [us].”

The victim said the villagers were saved by a military commander who “came from behind and said ‘stop!’”.

“Because of that we were saved.”

“We had closed our eyes as the soldiers were going to shoot.”

“We were … surrounded by soldiers who were using guns,” he said. “We were all terrified.”

The victim said at least 200 police and army personnel were involved in the alleged operation and that seven villagers were arrested. “They were beaten up then taken away to the place of detention at the military post.” Among those detained were a church minister, office workers and local government department bureaucrats, he said.

The victim said he and other villagers were kicked and beaten with rifle butts while detained in the church until midday on Sunday 26 January, and that they remained “very scared”.

“The situation is not suitable yet to go into the town. The community is empty. There are five churches and they are also now empty,” he said when Guardian Australia spoke to him on Tuesday.

Two families were also forced at gunpoint to burn down their own houses, he said.

Guardian Australia approached the Indonesian embassy in Canberra about the alleged incidents, but a spokesperson declined to comment.

The chief of Puncak Jaya police, Marselis Sarimin, denied there was a siege at the church and said reports about violent conduct on behalf of the armed forces had been “exaggerated”.

Sarimin said he and other officers were at the church in Dondobaga early on 26 January morning to investigate reports that someone had entered the building carrying a weapon.

He said three people were arrested for questioning during the investigation but they had since been released.

“There were not seven people, they were only three people. The first one was released that day. The second was released the next day. There's no proof of anything that has been said. We released them all,” he told Guardian Australia.

He denied civilians had been beaten and threatened at gunpoint.

“If there are stories around the community that there was torture, it’s lies,” he said. “The news is exaggerated.”

Sarimin said the town had since returned to normal. “The community here is as usual. They hear gunshots but that’s usual here, because there’s a TPN/OPM base here,” he said.

“I have worked in this area for five years now, so I know the reality. There's no problem here.”

The alleged incident took place a day after members of the OPM attacked a local Indonesian military post and stole weapons and set alight a military vehicle. A soldier and a member of the OPM were then killed in a shootout, a local military commander told Indonesian media.

The OPM, which is waging an armed struggle for independence in West Papua, has claimed full responsibility for last Saturday’s attack on the military post and said the targeting of civilians is unwarranted.

“We carried out all the actions as acts of resistance in Puncak Jaya, to decide our own destiny. It wasn’t the community and church minister who they viciously treated that carried out those acts,” a spokesperson for the OPM, Yunus Enumbi, told West Papuan news outlet Jubi.

“The church leader has never taught us to resist [the Indonesian government]. Those who are carrying out the true resistance are the TPN/OPM. We will not run away. We are at our headquarters. Come if you want and face us,” he said.